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Open farm up to bids for inputs
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Larry, High Speed
Posted 8/4/2006 23:06 (#32765)
Subject: Open farm up to bids for inputs


...Cable Huy.

Has anyone ever thought of opening up their input supply to bids? Say, select three or four different suppliers, have a bidding process and take the lowest bid. Just liek they do for construction jobs, etc. I've thought about to se how well it would work because I am really contemplating a No Soliciting at the entrance of my drive to keep some of the no namers and my non-preferred suppliers away.
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John Burns
Posted 8/5/2006 01:27 (#32796 - in reply to #32765)
Subject: RE: Open farm up to bids for inputs



Pittsburg, Kansas

We do it all the time but it is not bidding as in an auction. I think you would have to get an awfully big deal together to get anybody interested in that. Our bids are let out more on the order that a school or government bid process might be done. I've served on different boards where we did that for all major purchases.

I guess we don't really tell them they are bidding against someone else but they surely have figured it out. Then we pick the best value - not always the very cheapest but usually is as most of the local dealers give good service. We try to get a package bundle big enough together it makes it worth the time of the manager to price it. Usually a list of several things we need and the volumes we will purchase. We don't "Jew" on them or ask them to "match" anybodys price. They know we expect their best price the first time around. If at the end of the year their sales volume to us was not nearly as big as last year they know they weren't competetive. If prices seem way out of line from what we can do on the internet then we will occasionally buy from internet or long distance but only if there is substancial price discrepency. We try to buy locally as much as possible.

We do the same on pickups. Send bid specs to comercial department of several dealerships. In a big dealership there is usually one special person that handles all the comercial and fleet sales. They don't hassle you like the car salesmen - they are used to dealing with businessmen instead of consumers. There is almost nothing I hate worse than to deal with a car salesman that has no authority to do anything and can't under stand that not everyone wants to find out how much payment is afordable then sell the vehicle that meets the payment limitaiton. Cash is just completely beyond their comprehension (may have to ask the manager if they actually can DO such a strange deal). Well, come to think of it, I hate weddings worse.

John



Edited by John Burns 8/5/2006 01:38
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Ed Winkle
Posted 8/5/2006 06:47 (#32820 - in reply to #32796)
Subject: Re: Open farm up to bids for inputs


Martinsville, Ohio
Good ideas, can't hurt to try and I would be surprised to see you NOT get results. Going to try this for our fall and spring needs here.

We do have a farmer buying group locally but you have to pay a membership fee to join but their prices are excellent from what I have seen. You are paying for the two expert women and I do mean expert who pull together the packages but you don't always get all the products/packages you might want specifically designed for YOUR operation...

Ditto on the truck buying experiences and weddings John...
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pat-michigan
Posted 8/8/2006 19:46 (#33891 - in reply to #32796)
Subject: RE: Open farm up to bids for inputs


Thumb of Michigan
Our "bid" strategy is much the same as Johns. I put out a list of inputs I need, container size, and the drop dead delivery date. We also had to start putting the oldest product we would accept on the list a few years ago. That was primarely because of 1 supplier picking up overstocked chems from out of state. There are at least 2 problems with that type of product. The first is that he shipped us some real junk. Atrazine trying to come out of the jug in 1 big blob. Dry AMS that had been beat up pretty badly and the bags stapled back together. The second problem is warranty. I like to think I have a pretty good relationship with many of the area reps for most of the products I use. You really have a tough time getting a rep, no matter how good he is, to warrant a product that may have came from 3 time zones away, and produced 3 years ago. We won't deal with that particular supplier anymore, regardless of the price.

We don't buy "packages" of products. I tell all the suppliers up front, and they all know it by now, that I'll pick 1 product out of 10 priced if its better than anyone elses. They really don't like that aspect, but its the way we price. Kinda like buying the body of a pick-up from one guy, the tires from another, the motor from yet another guy. I do shoot myself in the foot a lot of times by not capitalizing on some of the chem companies bundles. I find most of those bundled programs something that doesn't work for my specific problems anyway.

All the suppliers I do deal with know up front that they get one shot at the price. And they all know that there price won't be used as leverage to get a better deal down the road. I, like John, have a few variables I figure in thats hard to put a price on. When I retailed fert and chems, there was nothing I hated more than a guy who took everyones price around and tried to get the next supplier to beat the price. I only played that game once, and it burned me. I would'nt play it again. Just to clue you guys in that do that- if your suppliers are anything like here, you'll NEVER get as good of a bid as the guys who have a little integrety in there dealings. A supplier isn't ever going to give his best deal to someone he knows is going to lay it out to his competitors. Everyone we deal with knows we want to buy as good as we can, but I've been told by all of them that they really appreciate that the deal I'm quoted isn't public knowledge within 24 hrs. Not trying to be preachy, just lay out what I've learned over the years.
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bgunzy
Posted 8/5/2006 08:35 (#32849 - in reply to #32765)
Subject: RE: Open farm up to bids for inputs



Humeston, IA
I put together an RFQ (request for quotes) in late December for chemicals and application from the various suppliers in the area.  I was able to tell them how much of each product based upon rates and acres to apply.  Worked out very well this year.  Went with a local supplier who previously was not up to par but got their act together this year.  They did an excellent job, and I'll probably do business with them again.  Might not use the RFQ because of this.
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Kingbaby
Posted 8/5/2006 08:51 (#32853 - in reply to #32765)
Subject: RE: Open farm up to bids for inputs


Greencastle, Pa.
In 1996 we wanted to double the size of our turkey operation and was looking at different ways to finance it. This is what we did. We still owed on the farm land and buildings from 1979, and a large amount on the first part of the turkey operation from 1992. Most of that money was in the 9/10% range.So, taking a hard look at it all we decided the thing to do was roll it all [including the new turkey barns] into one "package" Took all the time we needed to put it all to gather [all the i's dotted, t's crossed,etc,etc.] then put it out on "bid" to ten different banks/loan insitutions. I never called a one of them, they ether called or sent a bid. Ended up the local bank that we dealt with got the bid,8.35% int. rate fixed. As intrest rates dropped in the late 90's early 00's we have gotten the interest rate down to 5.75% fixed for the life of the loan. This has really worked for us. We look at "Money" as a "Commodity" or "Input" just like seed,fertilizer,equipment,etc for the farm business.
"Kingbaby"
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Sek farmer
Posted 8/5/2006 10:22 (#32890 - in reply to #32765)
Subject: RE: Open farm up to bids for inputs


Over the last 20 years suppliers went by the way side till now therei is a monoply of retailers and they pretty much think they can charge what they want. The private guy we buy seed from got to talking one day about him handleing herbicide since he had contacts already through the seed business. I would be willing to put together a package for him to work with and so it went with a few other farmers in the area. Now several years later he sells several times more than all the other local guys put together. The guys that got started on the ground floor with him pretty much buy at his cost so it has worked out really well. I am amazed at the number of semi loads that come into that place now. I can't blame the retailers in the beginning as their cost of doing business escaleted to the point they were not competive so we not only lost a supplier but also lost lots of services that we no longer have access to. So goes it these days.
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BrentOntario
Posted 8/5/2006 23:18 (#33064 - in reply to #32890)
Subject: RE: Open farm up to bids for inputs



One of the largest customers of our local fuel co-op talked about switching suppliers; it got them talking better.

The consensis here for ag inputs, whether to patronize the co-op or private dealer here locally, is to shop at both and split your business. This will keep both suppliers solvent and stay in business; to avoid monopoly pricing should the other fold.
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DaleK
Posted 8/5/2006 20:55 (#33019 - in reply to #32765)
Subject: RE: Open farm up to bids for inputs


We do for our custom dairy supplement, thinking about the same next year for seed and others. Have been ending up with the same feed company for about 3 years now but with this years haylage the ration ended up needing much less protein, they wanted to keep charging the same price per ton but one of the competitors came up with $50/ton less. At 3 tons a week that's a lot of dough.
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